The Financial Crisis and the Sustainability Crisis Have a Common Cause

How are the financial crisis and the sustainability crisis connected?

They are both fueled by large numbers of business people simultaneously using a narrow, short-term view of their responsibilities.

A short-term view is thinking that is narrowly focused on accomplishing short-range internal company goals and fails to consider the impact of business choices beyond the company’s walls and beyond the current financial reporting period.

Using such a narrow definition of corporate responsibility leads businesses to make unethical decisions. Read more about the implications of business leaders using short-term thinking in these articles:

“Sustainable Investing and the Next Economy” by Joseph F. Keefe, Speech to the Boston Economic Club, Federal Reserve Bank of Boston

“Short Term Thinking Shorts us All” by Jeffrey Hollender

“Short-Term Thinking Linked to Compensation Problems” by Justin Lahart, WSJ Blogs

 

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For more, see Linda’s book 7 Lenses and the 21 Question Assessment: How Current is My Message About Ethics?
 
  7 Lenses is a Bronze Axiom Business Book Award Winner in Business Ethics41cEVx-Tu4L._SY344_BO1,204,203,200_
  2014 Axiom Business Book Award Winner 
  About 7 Lenses
 
 
Info@LeadinginContext.com  @leadingincontxt  @7Lenses

© 2010 Leading in Context LLC 

A Profitability Focus Signals Short-Term Thinking

Ask for profitability and your company may get it, at the expense of customer satisfaction, employee engagement, and product safety. Making profitability a top business goal may lead to massive environmental damage and community backlash that destroys your brand.

What goes wrong when you put profitability first?

Having profitability listed in the top business goals of the company is now considered short-term thinking. Putting profits first ignores the risks inherent in the company’s industry and ignores customer needs and expectations. It encourages risky behavior because it doesn’t even attempt to address the true complexity that is inherent in running a company – a delicate balancing act requiring meeting customer needs and wants at the same as you achieve employee engagement, product safety, minimizing environmental impact and dealing with many other complex variables.

A pure profitability focus is based on an outdated cause-and-effect model, a belief that we can control our profit with our choices and that those choices are more important than our constituents and the impact of what we do on our economic system, our environment and our local and global communities.

“Is Profit as a Direct Goal Overrated?” Jim Heskitt, Harvard Business School Working Knowledge

“Customer-Centric Capitalism” by Irving Wladawsky-Berger

“Profit Can’t Be Primary Goal of Business” by Vivek Kaul

 

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For more, see new book 7 Lenses and the 21 Question Assessment: How Current is My Message About Ethics?

7 Lenses is a Bronze Axiom Business Book Award Winner in Business Ethics41cEVx-Tu4L._SY344_BO1,204,203,200_
2014 Axiom Business Book Award Winner 
About 7 Lenses
 
 
Info@LeadinginContext.com  @leadingincontxt  @7Lenses

© 2010 Leading in Context LLC 

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